uc 



DECISION OF 

THE APPEAL SECTION 

WAR DEPARTMENT CLAIMS BOARD 

In re 

CLAIM OF WOOL GROWERS 
CENTRAL STORAGE CO. 

Case No. 2621 



AUGUST 25, 1920 




WASHINGTON 
GOVERNMENT PRINTING OFFICE 

1920 



*> 



\9 



\ 



> 



H. *f J. 



BEFORE THE WAR DEPARTMENT CLAIMS BOARD APPEAL 

SECTION. 



August 25, 1920. 



Case No. 2621. 



In (he mailer of the CLAIM OF WOOL GROWERS CENTRAL STORAGE CO., 
SAN ANGELO, TEX. (Re WOOL.) 

FINDINGS OF FACT. 

1. This case arises under the act of March 2, 1919. Statement of 
claim Form B has been filed under Purchase, Storage, and Traffic 
Division Supply Circular No. 17, 1919, for $247,203.88 by reason of 
an agreement alleged to have been entered into between the claimant 
corporation and the United States. 

2. As the result of the success of the German drive in the spring 
of 1918 it was decided by the General Staff not only to increase in 
number and accelerate the movement of troops to France, but to 
increase the number of troops held in reserve in the United States. 
This resulted in the sending of very heavy requisitions for woolen 
clothing of all kinds to the (them Supply and Equipment Division, 
afterwards called the Clothing and Equipage Division, of the Quarter- 
master Corps, and orders were issued that the new supplies were 
needed in the shortest possible time. The quantity of wool eon- 
trolled by the Government was inadequate to supply the require- 
ment of the greatly increased army and it was necessary to take some 
steps to insure a supply adequate to meet the demands of the Clothing 
and Equipage Division. 

3. Thereafter on or about the 4th day of April, 1918, Mr. A. L 
Scott, chief of the Supply and Equipment Division of the Quarter- 
master Corps, called on Mr. II. S. Bookings, chairman of the price 
fixing committee of the War Industries Board, the result of which was 
that a series of meetings were held between representatives of the 
Quartermaster Department, the War Industries Board, and the wool 
dealers and growers of the United States. Finally on the morning 
of April 2.1, 1918, at a conference held in Washington, D. C, by mu- 
tual agreement, the price of the 1918 clip was fixed on the basis of 
prices prevailing on July 30, 1917, and it was arranged that the War 
Department was to have a prior right to obtain all or such portion 
of the domestic clip as the War Department might require. 

9330—20 1 (3) 



4. The details For taking over the wool under option of the wool 
trade and the regulations for handling the domestic clip were to be 
arranged by the office of the Acting Quartermaster General in con- 
junction with the wool section of the War Industries Board. 

5. The War Industries Board then proceeded to work out the neces- 
sary regulations and schedule of prices, and under date of May 2i T 
1 9 1 S , issued the following pamphlet: 

GOVERNMENT REGULATIONS Foil HAN W.IXO WOOL CLIP OF L918. 

The War Industries Board has fixed the prices of the 1918 clip of 
wool as established by valuation committees and approved by the 
Government as those established on July 30, 11)17. at Atlantic sea- 
hoard markets. These values are figured on scoured basis. (See table 
on p. 7.) 

Ri<th*s ■ fthe Govt rnmt n*. - -The ( rovernment shall have a prior right 
to acquire all of the 1918 wool clip, or any portion thereof which it 
may require, at the prices fixed by the War Industries Board. The 
remainder will be subject to allocation for civilian purposes under the 
direction of the War Industries Board. 

A very large portion of the wool-manufacturing machinery work- 
ing on Government contracts is located close to the Atlantic seaboard, 
and in order to avoid the possibility of railroad delay and congestion 
late in the season when the crops are moving, it is desirable and neces- 
arv that the wool clip shall be collected as soon as possible at points 
near to the manufacturing centers. For these reasons it has been 
considered advisable to designate as distributing centers those centers 
which are close to points of consumption and which have the neces- 
sary facilities for handling wool. 

Necessity for concentration. — The necessities of the Government at 
this time are such as to require the use of all existing agencies for 
concentrating the wool near the centers of consumption. Therefore 
all the wool of the 1918 clip must be distributed through approved 
dealers in approved centers of distribution. 

Approved dealers dt fined. Approved dealers shall be those dealers 
authorized b\ the War Industries Board to handle wool who are 
located in the distributing centers and who buy from growers direct, 
through agents, or from country merchants; and also those dealers 
authorized by the War Industries Board who are located in wool- 
growing districts, and who buy direct from growers and resell, or 
consign to the dealers in distributing centers. 

Approved distributing centers are the usual well recognized points 
of distribution. 

Classes of wool. In a general way, the clip may be divided into 
fleece wool and territory wool. 

Fleece wool shall be considered as that which is grown in the States 
east of the Mississippi River, and also the States of Minnesota, Iowa, 
Missouri, Arkansas, and Louisiana, and also those parts of Kansas. 
Nebraska, North Dakota, and South Dakota, and other localities 
where the same general conditions prevail. All wool not listed as 
fleece wool shall be considered territory wool. 



In order that the collection of the clip may proceed in a rapid and 
orderly manner, the following regulations arc promulgated by the 
Wool Division of the War Industries Hoard: 

FLEECE WOOL REGULATIONS. 

Compensation of grower and dealer. — Approved dealers shall be 
entitled to a gross profit in no case to exceed 1 \ cents per pound on 
the total season's business, this profit to cover all expenses from 
grower to loading wool on board cars. 

The grower shall receive fair prices for his wool based on the At- 
lantic seaboard price as established on July 30, 1917, less the profit to 
the dealer, as stated above, and less freight to seaboard, moisture 
shrinkage, and interest. 

In no case shall this be construed to mean that there shall be more 
than 1 J , cents gross profits made from time wool leaves growers' hands 
until it arrives at the distributing' center. 

On consignments forwarded to distributing centers the prices to be 
paid for the wool to the approved dealers therein shah be those estab- 
lished by the valuation committee on Atlantic seaboard values of 
July 30, 1917, to which shall be added a commission of 4 percent to be 
paid by the Government, if bought by the Government, or by the 
manufacturer to whom the wool is allotted for other than Govern- 
ment purposes. This commission is to include 1 grading and other 
expenses of handling. The consignor shall be charged w ith the freight 
on his shipment and interest on all advances made for his account to 
tin 1 date of the arrival of his wool at a distributing center, as shown 
by the railroad receipt. 

On any lot remaining unsold in his possession for a longer period 
than six months the dealer shall be entitled to charge storage and 
insurance at the market rate, and this additional charge shall be 
added to the price of the wool. 

Pooling l>>/ growers is adt ised. Growers who desire to do so will be 
allowed to pool their clips in quantities of not less than minimum 
carloads of 10, ()()() pounds and consign the wools so pooled as one 
account to any approved dealer in any approved distributing center. 
Growers are urged to adopt this latter course through county agents 
or others, thus eliminating tie' profits d one middle man. 

Government price. — Approved dealers in approved distributing 
centers will be required to open and grade all their purchases or con- 
signments as rapidly as possible after the arrival of wool at point of 
distribution. Prices on all wools, as soon, as graded, will be fixed 
by a Government valuation committee appointed for that purpose 
hi the different distributing centers. Prices to be paid by the Gov- 
ernment at distributing centers for such wool as it may require are 
to be those established as of July 30, 1917, at the Atla itic seaboard 
markets. In addition to said prices the Government is to pay a 
further sum equal to 4 per cent of the selling prices to cover compen- 
sation o] - commission to approved dealers for their services in col- 
lecting and distributing wool. On wool not taken by the Govern- 
ment for its own use and which may be allocated for other uses, 
prices will also be fixed hi accordance with July •'!(), 1917, values at 
Atlantic seaboard markets, and on such wool approved dealers shall 
be entitled to a commission or compensation of a sum equal to 4 per 



cent of the selling price, and this commission or compensation shall 
be a charge against said wool and shall be collected from the manu- 
facturer to whom said wool is allocated. 
Profiteering is prohibited. 

■>: * * * * * * 

Distributing centers. -Trie approved distributing centers for fleece 
wools are: 

Boston, Mass. 



TERRITORY WOOL REGULATIONS. 

Exceptions. — 

:|: * * * * * * 

Distributing centers. For the reasons before stated, in order that 
the 1918 wool clip may be properly concentrated near the manufac- 
turing centers a id to make use of every available agency for storing 
and grading, all territory wools must be consigned to one of the 
designated distributing centers, which are as follows: 

Poil laud. Oreg. New York, X. Y. Boston, Mass. 

Chicago, III. St. Louis, Mo. Philadelphia, Pa. 

* * :j: * * * * 

Shipping.- -As soon as possible after wool reaches the railroad, the 
owner should load it and consign it to any approved dealer he may 
select in one of the designated distributing centers, who will there 
deliver the wool to the Government or to some manufacturer to 
whom the Government may allot the wool. These approved dealers 
will store, insure, handle, aid deliver the wool under Government 
regulation. The grower should procure two copies of the shipping 
invoice and of the railroad bill of lading, aid forward the original 
invoice and bill of lading to the dealer whom he has selected to handle 
his wool, retaining the duplicate in his own possession. 

Advances, interest and freight. — The grower shall be entitled to 
receive an advance up to but not exceeding 75 per cent of the fair 
estimated market value of his wool. He shall pay interest on this 
advance at the rate of 6 per cent per annum from the date he receives 
such advance until his wool arrives at the distributing center as 
shown by the railroad receipt. It is not intended that the grower 
shall pay interest on advances after the date of arrival as shown by 
the railroad receipt, and he shall be entitled to receive interest on 
the selling value of his wool after freight has been deducted from 
date of arrival. The Government is fixing the price of the 1918 clip 
on a basis delivered at Atlantic seaboard points. It is therefore 
incumbent on the grower to deliver his wool at the designated dis- 
tributing centers, and the expense of delivering the wool at such 
centers will be charged against the wool, on a basis of the freight 
rate from point of origin to the Atlantic seaboard. 

Valuing and grading. As soon as possible 1 after the arrival of the 
wool at a distributing center, if the wool is to be taken in the original 
bags, it shall be valued by the Government valuation committee. 
If the wool is to be graded it shall be valued in the piles by the Govern- 
ment valuation committee as soon as the piles are graded and ready 
for delivery. All grading will be conducted under Government 



supervision. The grades out of each clip will be weighed separately 
and the hooks of the dealer, as far as they pertain to any grower's 
wool, shall be open to him. Tags, bucks, 'black or other recognized 
discount fleeces will be paid for at prices fixed by the Government. 
Bags will be paid for in the same manner. 

Payments to growers. — Growers shall be entitled to payment on a 
basis of the date of the arrival of the wool as shown by the railroad 
receipt. However, as it would be impossible for obvious reasons 
to make settlement on each clip on the date of its arrival, in order 
that the grower may lose nothing by any delay in settlement, he 
shall he entitled to draw interest on the selling price of his wool less 
freight from the date of the wool's arrival until the date of final 
sett lenient. 

Final returns will be made as promptly as possible in all cases. 

Commissions. — The grower does not pay the commission or com- 
pensation for handling wools in the designated distributing centers. 
This commission or compensation for handling will be added to 
selling price of the wool and paid by the buyer." 

If sold in the original bags, the commission or compensation shall 
be 3 per cent of the selling price. Tf the wool is graded, the com- 
mission or compensation shall he 3| per cent of the selling price. 
This commission or compensation includes drayage, storage, and 
insurance for a period not exceeding, o 1 any lot, six months after 
arrival. On any lot remaining unsold in his possession for a longer 
period than six months the dealer shall be entitled to charge storage 
and insurance at the market rate, and this additional charge shall be 
added to the price of the wool. 

MtUs located in wool-growing districts. — ■ 
******* 



Permits to dealt rs. 
* * 



Lewis Penwell, 
Chief of Wool Division. War Industries Board. 



VALUATIONS AS OF JULY 30, 1017. 
***** 

7V.m.s-. 





Basis clean scoured. 




('Inure 


Average. 


Inferior. 


12 months 


$1.75 
1 55 


$1.70 
1.50 
1.45 


$1. 65 


Good 8 months 


Good (i months 


1.50 


1.40 





****** :f; 

Under the foregoing regulations the United States Government 
proceeded to handle the wool clip of 1918. 

(). On or about March 1, 1918, Mr. Charles J. Nichols, of Boston, 
was appointed Wool Administrator and at the time of the taking 



over the control of the 1918 wool by the War Department under fch ■ 
auspices of I he War Industries Board, Mr. Nichols, as Wool Admin- 
istrator, was placed in charge of the operating and organizing with 
the wool purchasing quartermaster to look after the accounting, 
warehousing, and financing of the handling of the 1918 wool clip. 

7. Thereafter Mr. Nichols proceeded to appoint the Government 
valuation committees provided for in the regulations for the handling 
of the 1918 wool clip, whose duty it was to visit the various wool 
warehouses and there grade the wool exhibited to them by the 
operators of the warehouses. 

8. The Wool Growers Central Storage Co. (Inc.), of San Angel o, 
Tex., a cooperative association, had been in business a good many 
years receiving from its clients shipments of wool which were in 
turn stored in its warehouse where the various wool buyers were in 
the habit of coming and bidding on and buying the wool. This 
association did not itself buy wool but handled the woo! on a solely 
commission basis, as well as made loans to its various clients up to a 
certain percentage of the value of the wool, asset, by the selling com- 
mittee of ? ool Grow* rs Central Storage Association. After the wool 
had been sold by this association, the amount of money advanced, 
as well as the commission, would be deducted from the amount re- 

il from the sale of the wool and the client would be paid the dif- 
ference. The wool shipped to this companv came ebieilv from the 
counties of Tom Green, Sterling, and Concho and other counties 
which were either adjacent to San Angelo or within 100 or 200 miles 
of the same. While this company received most of the wool thai was 
grown in these counties and territory adjacent to San Angelo, certain 
growers did not ship to them, but shipped (heir woo! directly to 
Boston or other woo! dealers in Texas. 

9. Wool as it comes from the sheep's back is designated as being 
in the grease, which means thai it contains a large quantity of yolk 
or natural grease, and also, besides dust and vegetable matter, a 
considerable amount of dried perspiration, or suint, sand, and other 
dirt that is (licked ur> and sticks to the wool. The wool to be made 
usable has to be washed a, id scoured (hiring winch process all of the 
foreign matter and the grease is washed out. The amount of weight 
lost through the removal of these substances when tin 1 wool is washed 
or scoured is termed shrinkage, and the percentage of shrinkage 
varies from 20 to SO per cent. In addition to the regular scouring 
process it would sometimes become necessary, for the purpose ol 
entirely removing all foreign matter from the wool, to put it through 
a process known as carbonizing. This method causes a shrinkage of 
from 1 to .'! ner cent greater than the scouring method. A good 
buyer is usually able to estimate within 1 or 2 per cent of the shrink- 
age. The factors to be considered in this connection are the breed, 



9 

the soil, the climate, and the care with which the sheep are raised, 
as well as the diligence with which the fleeces are put up. Fine wools 
always shrink more heavily than coarse; and pulled wools, since they 
are washed and brushed during the process, show a much less shrink- 
age than the fleece wools. 

10. Texas wools were designated as 12 months wool, which means 
wool sheared from sheep once a year: good 8 months wool, which is 
wool sheared at the end of eight months growth; and good 6 months 
wool, which means wool that is sheared every six months. During 
the shearing season the sheep are rounded up and are driven into pens 
from which shoots lead off to smaller pens, which hold about 10 sheep 
each. Each pen has a Mexican shearer and assistant. The sheep 
are sheared one at a time and the wool or fleece which comes from 
each individual sheep is tied up separately and in turn placed in a 
wool sack which holds on an average of 220 pounds of wool. The 
quality of wool coming from each sheep varies in that the wool that 
comes from certain portions of the sheep is more valuable than others. 
The part immediately over the shoulder blades being cleaner and 
more free from dirt than the part that comes from the stomach or 
from the hind legs, where the wool is often discolored and has attached 
to it more or less particles of manure. The buyer of wool must 
therefore necessarily be able to estimate the portion of good wool in 
each fleece as well as the amount of dirt and grease and he places 
his estimate on it in the grease, estimating that when it is washed 
there will be so many pounds of clean wool secured from each 100 
pounds in the clip. 

11. When a wool buyer goes to a warehouse for the purpose of 
buying wool the representative of the warehouse gets down a certain 
number of bags out of each clip amounting to from 5 to 7^ per cent 
of the weight of the clip. These bags are then opened at the top and 
slit down, the side so that the individual fleeces making up the bag 
are exposed and can be readily handled by the buyer. The buyer 
usually handles each fleece in the bags so exposed, examining them 
for weight, length of staple and amount of dirt and grease, and from 
this examination makes an estimate of the amount the wool will 
shrink when scoured. 

12. The committee that was sent to San Angelo to grade the wool 
in the warehouses of the Wool Growers Central Storage Co. was com- 
posed of Mr. Cardwell-Palmer, the Texas representative and purchasing 
agent of Texas wools for the firm of Jeremiah Williams & Co., of 
Boston, Mass.; Mr. C. D. Stokes, banker and merchant of Texas and 
the Texas representative of Winslow & Co.; Mr. H. M. Cummings of 
Boston, a member of the firm of Brown & Adams, of Boston, and a 
wool buyer familiar with Texas and western wools generally; and 

9330— 20 2 



10 

Albert S. Baker, who was formerly connected with Studley & Emory, 
of Boston, Mass., all expert judges of wool. 

13. On the 17th day of September, 1918, the committee as herein- 
above named arrived at San Angelo and proceeded to examine the 
wool in the warehouse of the claimant. The Government valuation 
committee was met ami accompanied in its inspection of the wool in 
the warehouse of the Wool Growers Central Storage Co. by Mr. J. S. 
Allison, Mr. Robert Massie, and Mr. E. S. Couch, who with the nec- 
essary assistants took down from the various clips that had previously 
been weighed (and each bag numbered and marked with its weight 
and lot number) and exposed to the committee a number of bags 
equal to from 5 to 71 per cent of each clip. Each member of the 
committee handled this wool and made his own estimate of the 
shrinkage. After each individual clip had thusly been examined, 
the committee compared the results of their individual examination 
and the average was set down as the shrinkage of that lot of wool. 
The committee spent 10 days in the claimant's warehouse and placed 
values on all wool therein, except approximately 100,000 pounds 
designated by the committee as scouring wool. 

14. After the committee had completed their examination of the 
wool of the claimant, at the request of claimant's Mr. Alhson, of its 
selling committee, they went back and reexamined four lots of wool 
on which Mr. Allison had alleged they had placed too high a shrink- 
age. Upon reexamination in the opinion of the committee no change 
was found necessary. 

15. Mr. Albert S. Baker acted as secretary to this committee and 
after completion of the examination of the wool and prior to his 
departure left with the claimant a list of the wool examined by the 
committee and the shrinkage placed on each lot. He at the same 
time prepared and handed claimant an individual acceptance card 
for each lot of wool examined by the committee, which showed the 
Government and claimant's lot number and the price per pound. 
Each of these cards were signed by W. B. Savers, secretary of claim- 
ant company, and by him mailed to the Government Wool Admin- 
istrator at Boston, Mass., and. with the exception of the quantity and 
the price of the wool and lot number, were identical with the following: 

September 28, 1918. 

We accept the Government valuation of 65] per lb. on depart- 
ment lot No. S. A. 3588, out lot 108, stored as city San 

Angelo, State Texas. 

Wooi. Growers Central Storage Co., 
W. B. Sayers, Secty. 

10. After this committee had left and after the cards had been 
signed and mailed by said secretary of the claimant, it became dis- 
satisfied with the shrinkage that had been placed on the wool. Com- 



11 

plaint was made by the Wool Growers ('(Mitral Storage Co. to Mr. 
Lewis Penwell, chief of the wool division of the War Industries 
Board, Washington, D. C, and to Charles J. Nichols, Government 
Wool Administrator, that the Government valuation committee had 
placed an erroneous valuation on the .aid wool. 

17. On October 7, 1918, Mr. Nichols addressed the following lettei 
to the claimant: 

Boston, Mass., October 7, 1918. 
Wool Growers Central Storage Co., 

San Angelo, Tex. 

Gentlemen: We are receipt of a letter from the War Industries 
Board in regard to the matter of scouring some of the Texas wools 
on which there is a question of shrinkage, and in reply would say 
that if you will communicate with this office advising us of the situa- 
tion with the growers in question as to the amount and description 
of wool, also how much and to whom they wish to ship for scouring, 
we will go into the matter carefully and advise you in regard to same. 
Quite a percentage of the Texas wool is going to be used for a partic- 
ular purpose, and in making the tests for the growers we should also 
endeavor to interfere as little as possible with the plans for the ulti- 
mate use of this wool. 
Yours, truly, 

(Signed) Charles J. Nichols, 

Government Wool Administrator. 
CJN/W. 

IS. On October 14, 1918, the following telegram was sent claimant: 

[Western Union Telegram.] 

October 14, 1918. 
C. W. Hemphill, Coleman. Tex.: 

We have no objection your having Wool Growers Central Storage 
Co. forward wool direct to public scouring nr.ll Boston to be scoured, 
growers to pay charges. Government will then revalue scoured 
product. Same valuation committee appraised Texas wools Boston 
and San Angelo. See letter. 

Lewis Penwell, 
Chief of Wool Section, War Industries Board. 
MCK/NBB. 

Washington, D. C, 4.44 p. m., 

November JO, 1918. 
Sam Hill, 

President Wool Growers Central Storage Co., 

Sim Amnio, Tex.: 
Can send new valuation committee to revalue Central Storage 
Wools, but must be with understanding that new valuation is final 
and must be accepted by all growers whether better or worse than 
original valuation. Wire us wishes wool growers who consigned to 
you. We are sending copy of this telegram to Jeff D. Ayers and 
Coleman County Wool Growers Association. 

Lewis Penwell, 
Chief Wool Section, War Industries Hoard. 
6.20 p. m. 



12 

19. The result of this letter and these telegrams, and various others 
that are not quoted, was that a second valuation committee, com- 
posed of Mr. ('harles F. Angell, Jackson Salter, and Joseph Farquhar, 
was sent to San Angelo, Tex., for the purpose of revaluing the wool 
of the Wool Growers Central Storage Co. This committee received 
certain definite instructions from the United States Wool Adminis- 
trator, \vhi< h instructions were the same that had been given to other 
committees who had revalued wool where there had been a dispute. 
The said committee had in its possession a report of the findings of 
the first committee and Mr. C. D. Stokes, a member of the first com- 
mittee, was to accompany the second committee for the purpose of 
seeing that the wool exhil ited to the revaluing committee was the 
sanie wool that had been exhibited to the first committee. 

20. This revaluing committee reached San Angelo on or about the 
9th day of December, 1918, and proceeded to the warehouse of 
claimant in company with Mr. C. 1). Stokes and stated that their 
purpose was. and Mr. Stokes in turn stated that his instructions were, 
to see that the same wool was displayed to this committee that had 
been displayed to his. Thereupon certain growers of wool who had 
shipped their wool to the claimant and were interested in the out- 
come of the revaluation, along with the claimant, protested against 
any examination by this committee, alleging that the same did not 
meet with their approval, owing to the fact that Mr. Stokes was a 
member and this committee was bound under its instructions to 
accept the findings of the first committee, in the event their findings 
differed from the findings of the first committee. The revaluation 
committee only examined about four lots and then quit, and on the 
9th day of Dec-ember, 1918, the following telegram was sent to Mr. 
Nichols by the directors of the claimant company: 

C: 11. Nichols, 

Govt. Wool Admn., loo Summer St., Boston, Mass.: 
We, the directors of the Wool Growers Central Storage Co., after 
full discussion with the wool growers find they are not willing to 
accept the valuations of tl is new committee as final unless satisfac- 
tory to them. Do not care to go to the expense of handling these 
wools again unless absolutely final. Wire us instructions quick. 

(Signed) Robert Massie. 

J. S. Allison. 
S\m H. Hill. 
W. B. Save i:x. 
S. E. Cough. 

21. Mr. Nichols answered this on December 10, 1918, as follows: 

"Telegram received. Committee must proceed in customary man- 
ner as outlined. Letter instructions given Stokes. Revaluation as 
outlined is final. If revaluation not desired, Government will ac- 
cept wool basis first valuation or relinquish prior right to wools 
involved and release same." 



13 

22. On December 13, 1918, Mr. C. F. Angell, member of the second 
valuation committee wired Mr. Nichols as follows: 

"Have revalued a few more 'lips, but found no reason to change 
original valuation. The Coleman County Growers, who protested 
to Washington, left for home without asking revaluation, claim- 
ing that they would not he satisfied unless they chose one member of 
the valuation committee; therefore they would accept original valua- 
tion. Central Storage say will not be necessary to revalue any more 
wool, so will leave for Boston Saturday afternoon." 

23. Other than the few clips examined, referred to in the telegram 
last quoted, the revaluation committee examined no further wool. 
The claimant company proceeded to ship to the depot quartermaster 
at Boston, Mass., in October, November, December, and January, 
1918 and 1919, the wool in question, for which settlement has been 
made by the Government on the basis of the valuation and shrink- 
ages placed by the first committee. 

24. The evidence shows 332 bags, containing 92,822 pounds of the 
wool in claimant's warehouse, designated by the first, committee as 
heavy wool, which they stated would shrink 80 per cent, was sold 
by the Government at a public auction and purchased by the Centre- 
dale Worsted Mill, of Centerdale, R. I., and that, at request of Col. 
Gracy, when the wool in question was scoured, an accurate account 
of the shrinkage of same was kept which shows that the shrinkage 
of the wool in question was 79.89 per cent. 

25. The claimant alleges as follows: 

First. — That in the instructions issued by the War Industries Board 
hereinbefore quoted the Government agreed to pay them SI. 75 for 
choice 12 months, $1.70 for average 12 months, and $1.65 for inferior 
12 months, but that, notwithstanding this, the valuation committee 
placed a value of $1.72 on a portion of their 12 months choice, $1.68 
on some of their average 12 months, and $1.60 on some of their infe- 
rior 12 months; that the prices as set forth in the said regulations of 
May 21, 1918, were conclusive on the valuation committee, and the 
said valuation committee had no right or authority to place an} T less 
value on any of the wool falling under any of the aforesaid classes; 
and that the committee erroneously classed as short wool 27,600 net 
pounds of 12 months wool and allowed a price of only $1.55, or 
$27,600 less than the price should have been; and that the committee 
placed a higher price on some of their short wool than they did on 
their long wool, and that the short wool is far less valuable than long 
wool, as shown by the difference in the prices of the two articles 
fixed by the War Industries Board, where the highest price for short 
wool is $1.55, while the highest price for long wool is $1.75; that the 
committee allowed 9 cents per pound more for some of the short wool 
than it did for a portion of the long wool; that the estimate of shrink- 



14 

age made by the valuation committee is wrong; that the claimant 
sent to the United States Conditioning & Testing Co., of Philadelphia, 
Pa., 250 pounds of claimant's lot No. 339, Government lot No. 3569, 
and reports show it shrank only 68.92 per cent, while the valuation 
committee estimated that it would shrink 75 per cent; that 200 
pounds of claimant's lot No. 301, Government lot No. 3562, shrank 
67.50 per cent, while the committee estimated its shrinkage at 74 
per cent; that 24 pounds of claimant's lot No. 315, Government lot 
No. 3575, showed a shrinkage of 6S. 71, while the committee estimated 
the shrinkage at 78 per cent; that 22 pounds of claimant's lot No. 
205, Government lot No. 3569, showed a shrinkage of 66.29, while 
the Government estimated it at 75 per cent; that 26 pounds of claim- 
ant's lot No. 1S7X, Government lot No. 3570, showed a shrinkage of 
67.09, while the committee estimated the shrinkage at 77 per cent; 
that in arriving at the value of practically every lot in the claimant's 
warehouse the valuation committee made gross mistakes in its 
estimate of the shrinkage, amounts of dirt and grease in the said lots. 

Second. — That the United States forced and compelled claimant 
corporation to deliver to it the wool in its warehouse at the value 
placed thereon by the first valuation committee. 

Third. — That Mr. Sam Hill, vice president of the claimant cor- 
poration, entered into an arrangement and agreement with Mr. Lewis 
Penwell, chief of the wool division, War Industries Board, some 
time in May, 191s, that the freight they were to pay on their wool 
from San Angelo to Boston should lie based on the water rate from 
Galveston, Tex., which is cheaper than the all -rail rate to Boston, 
hut that notwithstanding this agreement they were compelled to ship 
their wool by the all-rail route, resulting in a loss or damage to it of 
$16,000; that they had an arrangement with the Santa Fe Rail- 
road known as concentrating privilege, under which when wool was 
shipped from a point in Texas to Galveston and from thence to 
Boston by ship, a certain rebate was made to the shipper, which 
amount was lost to it, and in addition it was forced to pay the differ- 
ence between the rail and ship rate and the all-rail rate from San 
Angelo to Boston. 

Decision. 

A careful analysis of the claimant's petition ami the evidence pro- 
duced presents to this Board for decision only three questions: 

First. — (a) Did the first Government valuation committee in 
placing the value on the wool of the claimant make any error in judg- 
ment and thereby place the value of the wool at a less figure than its 
true value ( 



15 

(6) Did the value placed on the said wool by the said com- 
mittee conform to the prices as set forth in the Government reg- 
ulations of May 21, 1918? 

Second. — Did the signing of the cards known as acceptance cards 
(claimant's Exhibit No. 14), and thereafter the shipping of the wool 
described on the said cards, at the prices therein set forth, and the 
acceptance by the said claimant of payment of the wool so shipped 
at the said prices, constitute an agreement or contract between the 
claimant and the United States, and is the claimant bound by the 
terms and the conditions of the said agreement, thereby precluding 
any award by this Board '. 

Third. — Was there any agreement entered into between Mr. Sam 
Hill, vice president of the claimant company, and Mr. Lewis Penwell, 
chief of the wool division of the War Industries Board, whereby the 
claimant was to be allowed to ship its wool by rail and water route. 
or, in lieu thereof, the claimant be allowed the difference, in freight 
between the all-rail route and the cheaper rail and water route 1 ? 

Fint. — (a) Did tin first Government valuation commiitex in placing 
the value on t/i< wool of the claimant make (in;/ error in judgment and 
thereby plaa the mint cftht wool at a less figure than its true value '. 

The burden of proof is on the claimant to prove by a preponderance 
of the evidence that the Government valuation committee made an 
error in judgment or a gross mistake, and placed a wrong shrinkage 
on the wool of the claimant. This the claimant, in the opinion of 
this Board, has failed to do. The committee appointed by the 
chief of the wool division of the War Industries Board consisted of 
four expert wool buyers, two of whom were representative men of 
Texas, conversant with conditions in the San Angelo district, familiar 
with the wool handled by the claimant, from which company they 
had often purchased wool for their houses. 

Mr. C. D. Stokes, of Lampasas, Tex., is a wool buyer of more than 
15 years' experience; a man who not only buys for himself but who 
is also the Texas representative of the firm of Win-low & Co., of 
Boston (the wool center of the United States), and one of the largesl 
buyers of Texas wools, who testified that he each year purchased 
for his firm millions of pounds of Texas wool. 

Mr. C. D. Stokes was so well thought of by the officers of the 
claimant company that on May 16, 10 IS, Mr. Hill, the vice president 
of claimant company sent the following telegram to Mr. Penwell, 
chief of the wool division of the War Industries Board: 

"I have known Stokes Bros., of Lampasas, Tex., for 30 years. 
C. D. Stokes intimately. They are bankers and merchants having 
considerable money out on wool. Have the confidence of every one 
that knows them. High-class honorable business men. Plenty 
strength financially. 



16 

Again on May 22, 1918, March Bros., G. T. Cynn, and S. H. Hill, 
claimant's vice president, forwarded the following telegram to Mr. 
Lewis Penwell: 

"We respectfully recommend C. D. Stokes, of Lampasas, and in 
our opinion he is one of the best judges of shrinkage of wool than 
any man in Texas or as good as any in Boston." 

Mr. Cardwell Palmer, of San Antonio, Tex., another member of 
this committee, is also an expert Texas wool buyer, conversant with 
the conditions in the San Angelo district and familiar with the wool 
handled by the claimant. Mr. Albert S. Baker, at that time a 
buyer for the firm of Studley & Baker, of Boston, by whom he. had 
been employed for 17 years, had a general knowledge of Texas and 
other wools, and he yearly bought for his clients large quantities of 
Texas wool. Mr. H. M. Cummings, the fourth member of the com- 
mittee and a member of the firm of Brown & Adams, of Boston, is a 
man whose experience as a wool buyer was second to none, and who 
was not only familiar with Texas wools, but was a buyer of wools in 
States adjacent thereto and the West. The livelihood of a wool 
buyer depends upon his ability to judge the shrinkage of wool. The 
evidence shows that a buyer of wool must be able to judge within 1 
to 2 per cent of its actual shrinkage value, that if he fails to judge 
within this percentage of its actual shrinkage, his firm in a course of a 
year would lose large amounts of money. 

The committee appointed by the Wool Administrator and sent to 
Texas for the purpose of valuing the wool of the claimant was com- 
posed of high-class men. In fact, the greatest experts in the employ 
of the larger wool houses of Boston. Not only this, but one of the 
members of that committee was placed thereon at the request of 
the claimant, whose telegram of recommendation we have quoted. 
Suggestions were made during the taking of the evidence, and in 
the argument, that Mr. Stokes had failed to properly judge the 
wool in question, and great stress was laid upon certain alleged 
alterations of a personal memorandum he kept on the shrinkages 
at the time this committee examined. This Board is of the opinion 
that this contention is without merit, as the average estimate of the 
whole committee was the value placed on the wool. 

Against the opinion of men of this caliber the claimant offers the 
evidence of Mr. Sam Hill, their vice president, who frankly admitted 
that he was not an experienced judge of wool, but was a wool grower; 
and the opinion of Mr. Allison, that his experiences of judging wool 
was limited to the immediate section adjacent to San Angelo; and 
Mr. J. M. Jones, employed as teacher in an agriculture school, whose 
testimony was to the effect that he had been associated with some 
wool experts, had been in wool houses, had helped shear some sheep, 



17 

but that he had never on his own examination purchased any woo! 
(p. 462 of the Record). 
The claimant has laid great stress on the result of a scouring tesl 

of the wool described in claimant's Exhibit No. 4. which consisted of 
a scouring test on one lot of 250 pounds, one lot of 200 pounds, and 
three lots of 20 pounds each, on which the report showed a shrinkage 
of 68.92, 67. .10. 68.81, 66.20. and 67.00, respectively, and they have 
strenuously argued that this scouring report shows conclusively that 
the shrinkage placed on their wool by the valuation committee was 
erroneous. They produced Mr. Jos. H. Shinn, of the United States 
Conditioning cv_ Testing Co., who testified to the method of the 
scouring of the samples referred to in the said exhibit, and who 
was unable to state whether or not the wool presented to him for 
this scouring test consisted of a better quality of the wool than the 
average run of the lot (p. .'500), and that he did not remember whether 
there was any dirt or dun locks attached to the wool; who further 
testified that out of lot No. 1S7X, Government lot No. 3570, he 
scoured 20 pounds out of 6.020 pounds, and that his house would 
require for an accurate test at least 21 per cent of the lot, which, in 
this instance, would be about 175 pounds. On page 403 he testified: 

"Q. In other words your rule- were not complied with '. 

"A. If it came out of 6,020 pounds I did not know that until 1 saw 
the figures here. 

"Q. Then you would not say that the test made by yon was an 
accurate test \ 

"A. As applying to the whole lot '. 

"Q. As applied to the whole lot. 

"A. As applied to the whole lot I would have to say no." 

Claimant through its attorney (p. 404) admitted that the last 
three lots on the bottom of the memorandum containing 20 pounds 
each, were not 2 A- per cent of the wool they were supposed to be 
representative samples of. 

The Government produced Mr. George M. Kerr, of Philadelphia, 
a wool buyer and salesman, who testified he had been in the wool 
business for 36 years and was connected with the Chas. J. Webb & Co., 
of Philadelphia, who bought a million or two million pounds of wool 
in the West each year, that he was familiar with Texas wools, that he 
had a conversation with Air. Shinn, of the United States Conditioning 
& Testing Co., and that Mr. Shinn showed him a 250-pound test 
which showed a shrinkage, according to his opinion, of 68.92 percent, 
and that in addition to this, that there 1 were three or four or five other 
tests that he (Shinn) was making for Texas wool growers, and that 
he made an examination of the samples in question, and in his opinion 
the samples had not been properly scoured, but had in them from 5 
to 10 per cent of grease or dirt that had not been removed (pp. 615, 



18 

618) ; that his object in going in to see the samples was to clot ermine 
whether or not he would buy any of the wool, and that his estimate 
of the samples that he saw in the grease would shrink around 70, 
73, or 74 per cent. 

The Government also produced Mr. Wra H. Lister, who testified 
he was in the business of making worsted yarn, that lie scoured wool, 
that he bought at the Government catalog auction sale No. 20, series 
No. 74, lot No. 150, S. A. 3576, at 27 cents and that the quantity 
of won! delivered under this was 92,872 pounds of wool, and was 
scoured at Centerdale, R. I., scouring mill, and at the request of 
Col. Gracey, an accurate scouring test was made of this wool and that 
the same showed a shrinkage figure of over 7!>l per cent (p. 937). 
The evidence further establishes the fact that this wool was a portion of 
the wool shipped to the Government warehouse in Boston by claimant, 
and was some of the wool that the Government valuation committee 
stated would shrink 80 per cent. 

Prior to the introduction of Mr. Lister, the Government produced 
Mr. Schofield, of Centerdale Worsted Mills, the man who had direct 
charge of washing or scouring the wool in question and who testified 
that it was the dirtiest and heaviest wool that he had ever washed 
(p. 790). 

This Board, at the earnest solicitation of claimant's attorney, per- 
sonally made an examination of the mill in question and the method 
employed by it in scouring this wool and its method of arriving at the 
percentage of shrinkage, and while the claimant in its argument has 
suggested that certain waste from the wool was not properly accounted 
for, this Board, from the evidence and its personal examination of said 
scouring mill, is of tin 1 opinion that this contention is without merit, 
and that the test as reported by this mill is a true test, and shrinkage 
placed on the 1 said wool by said mill is correct. 

The evidence that has been produced clearly establishes the fact 
that the year 1917-18, during which time the 1918 wool was growing, 
was one of the dry est years that has ever been experienced in Texas, 
and that during dry years the growth of the wool of a sheep is seriously 
interfered with and the staple is shorter than in the ordinary year. 
Not only this but (he wool is dirtier and has more sand and grit in it 
due to the dry and dusty season and the shrinkage of the wool is 
therefore greater. The evidence shows further that the wool handled 
by the claimant came from counties that were seriously affected by 
the drought. 

Taking into consideration all that has been stated above and the 
other evidence before this Board, this Board is of the opinion that 
the claimant has failed to produce any evidence that would justify 
it in reaching the conclusion that the valuation placed on its wool 
by the said Government valuation committee was erroneous, and 



19 

believes that the shrinkage placed on the said wool by the said Gov- 
ernment valuation committee was proper and correct. 

First. — (b) Did the valuation placed on the said wool by the said com- 
mittee conform to the prices as set forth in the Government regulations 
of May 21, 1918? 

Claimant has contended in its petition and strenuously alleged in 
Hs opening statement and argument to this Board, that the placing 
of the value on its said wools in any sum other than the specific 
figures set forth in the Government regulations of May 21, 1918, of 
$1.75, SI. 70, and $l!65 was erroneous and beyond the authority or 
power of the committee. 

The testimony establishes the fact that where wool was offered to 
the committee for valuation having a length of staple that did not 
justify the price of SI. 75 but was worth more than Si. 70, that instead 
of placing a value on it of SI. 75 the committee valued it at between 
$1.75 and SI. 70, and that where it examined wool that was not 
worth $1.70 but was worth more than $1.65, it placed a valuation 
on the said wool between these figures, and that where in its examina- 
tion of claimant's inferior 12 months wool it was apparent to the said 
committee that all wool in the said lot was not of a staple justifying 
a class as inferior 12 months wool, yet had in it sufficient wool of 
that length of staple to make it unfair to the claimant to give it a 
grade as short wool, that the committee took into account the various 
amounts of different staple in the said lot, and placed a value on 
each proportion, or grade, or staple, and averaged the same, thereby 
arriving at the price they placed on the wool. 

The custom of the wool trade in buying wool is that when it pur- 
chases a 12 months wool, the same is supposed to consist of wool of 
a length of staple that justifies it taking that class, and if there is 
mixed in it any wool of a different staple or length, the buyer at- 
tempts to make an average estimate of the amount or quality of the 
different grades or staple, and thus arrives at the average price per 
pound for (lie whole lot. This is the universal custom in the wool 
buying trade and was the practice followed by this valuation com- 
mittee in placing the value on the wool of the claimant. 

The regulations adopted by the War Industries Board were prepared 
by practical wool men, who had in mind the practices, uses and cus- 
toms of the wool trade, and this Board is of the opinion that when 
the said War Industries Board adopted the regulations of August 
21, 1918, the members of the valuation committee appointed under 
the provisions of the said regulations, were not thereby deprived of 
their individual knowledge of the uses and customs of the trade, nor 
were they precluded from placing on the wool examined by them t he- 
value they honestly considered the same to have, and that they were 



20 

the solo judges as to whether or not the wool exhibited to them for 
examination and valuation, wore fair samples of the grade, or class, 
they purported to be, and that if in their examination of any lot of 
wool exhibited to them purporting to be of any certain class, the 
same turned out to contain wool of a length of staple that did not 
justify it in taking that class, that this committee had the sole au- 
thority to estimate the various classes or grades in said lot, and to 
place on the same a price per pound different from the maximum 
price set forth in the regulations. 

This Board is therefore of the opinion that the valuation com- 
mittee in setting a price on certain of the claimant's wool at a different 
figure from that set forth in the Government regulations of May 21, 
L918, were wholly within their rights, and that the claimant has 
failed to produce any evidence that will justify this Hoard in revers- 
ing or setting aside the valuation placed on the said wool by the said 
committee, or will justify this board in reaching a conclusion that 
the said valuation was in any way erroneous or improper, and this 
Board believes that the valuation placed on the said wool by the 
said valuation committee violated none of the provisions of the said 
regulation of May 21 , 1918, and that the same wools of the claimanl 
were properly and fairly valued by the said committee. 

Second.— Did the signing of the cards known as acceptabh cards 
(claimant's Exhibit No. 14) and thereafter the shipping of the wool 
described <>n flu said cards, at tht prices therein set forth, and the ac- 
ceptance by the said claimant of payment of the wool so shipped at the 
said'prices, constitute an agreement or contract between the claimant and 
the United States, and is the claimant hound by the teems and the condi- 
tions oj tin said agreement thereby precluding any award by this hoard? 

At the time the valuation committee appeared at the warehouse 
of the claimant for the purpose of valuing its wools, every lot of wool 
in the warehouse with the exception of certain wools designated as 
scouring were valued by the committee and before their departure 
Mr. Albert S. Baker, their secretary made out and delivered to the 
said claimant cards known as acceptance cards (claimant's Exhibit 
No. 14). These cards were later signed by W. B. Savers, secretary 
of the claimant, in form as follows: 

September 28, 1918. 

We accept the Government valuation of 65^ pen- pound on depart- 
ment lot No. S. A. 3588, our lot, 108, stored at , city San 

Angelo, State Texas. 

Wool Growers Central Storage Co., 
W. B. SAYERS, Secretary/' 



21 

Each and every one of these cards specifically stated thai the 
Government valuation therein staled was accepted, and not until 
after the receipt by the Government of the cards accepting the prices 
of the valuation committee did the claimant complain. Thereafter 
the claimant protested and the second valuation committee being 
sent claimant refused to allow them to revalue its wools. On the 
14th day of August, 1918, claimant was sent the following telegram: 
C. W. Hemphill, Coleman, Tex.: 

We have no objection to your having Wool Growers' Central 
Storage Co\ forward wool direct to public scouring mill, Boston, to 
be scoured, growers to pay charges. Government will then revalue 
scoured product. Same valuation committee appraised Texas wools 
Boston and San Angelo. See letter. 

Lewis Penwell, 

Chief of Wool Section, War Industries Board. 
MCK/XBB 

Thereafter on the 10th day of December, 1918, a telegram was 
forwarded to claimant advising if the Government would release the 
wool m question and allow the claimant to dispose of same in the 
open market, a.s follows: 

Telegram received. Committee must proceed in customary man- 
ner as outlined letter instructions given Stokes. Revaluation as 
outlined is final, [f revaluation not desired Government will accept 
wool basis first valuation or relinquish prior right to wools involved 
and release same. 

The claimant therefore had the option of doing one of the three 
things: First, send the wool to Boston to have it scoured and the 
price fixed on scoured basis. Second, have the Government release 
the wool to it for sale in open market. Third, accept the value placed 
on its woo! by the first valuation committee. 

Claimant was in a position to elect what it would do under the 
circumstances, and it elected to ship to the Government in accordance 
with its first acceptance, and having so elected did ship and has 
received from the Government every cent called for in the cards of 
acceptance. 

This Board is therefore of the opinion that the claimant by the 
signing of the said acceptance cards and the shipping in accordance 
therewith and the acceptance of the amount called for thereon, is 
estopped from asserting any further claim on account of the selling 
price of the wool in question, and that this Board is precluded from 
granting to claimant any relief on account of a transaction that has 
been completed by performance and payment. 

Third.— Was then ami agreement entered into between Mr. Son, Hill, 
via president of th( claimant company, and Mr. Lewis Penwell, chief 
oj wool division of the Mar Industries Hoard, whereby the claimant was 



22 

to fa allowed to ship its wool hi/ rail and miter route, or in lieu ther of, 
tht claimant be allowed the difference in freight between the all-rail route 
ami the cheaper rail and mater route. 

The evidence shows that some time in May, 1918, Mr. Sam Hill, 
vice president of (he claimant corporation, was in Washington and 
e tiled on Mr. Lewis Penwell, chief of the wool division, War Indus- 
tries Board, who went with him to the Director General of Railroads 
in an effort to get authority to ship the claimant's wool by boat from 
Galveston instead of by the all-rail route. Mr. Hill returned to 
Texas about the 22d of May, an. I on the 6th of dune, 1918, Mr. Pen- 
well addressed the following letter to claimant: 

" I have your letter of May 22d regarding the shipment of wool by 
water to the Atlantic seaboard distributing center. 1 note that you 
have taken the matter up with the Shipping Board and I shall be 
glad to see if there is anvthing further that can be done. However, 
I understand that the shipping situation is still very acute, and there- 
fore assume that it is extremely doubtful whether they will allow 
boats to be used in this cast 1 ." 

On September 13th Mr. II. M. Cummings, of the valuation com- 
mittee, in addressing Mr. Nichols, the Wool Administrator, has the 
following to say as to the freight: 

"* * * Mr. Sam Hill, of the Wool Growers' Central Storage Co., 
was here last evening, and told Mr. Schreiner that Mr. Penwell told 
him while he. was in Washington last week that the freight rate should 
be figured based on the rail and water rate. As instructed by you, 
we have figured the rate here 228, which is the all-rail rate, and shall 
figure the Angelo wool the same way unless otherwise instructed. 
As you know, all the Texas wool which was shipped direct to either 
Boston or Philadelphia, was shipped all rail. The rate of 228 is 25 
per cent more than the rate the other wools carried on account of the 
increase in all railroad rates. The rail-and-watef rate is, of course, 
cheaper than either of the above all-rail rates." 

Under date of September 18, 1918, Mr. Charles J. Nichols wired 
Mr. Lewis Penwell as follows: 

"Our valuation committee in Texas have valued ovev thousand 
lots giving grower the net Texas price for his wool deducting two 
twenty-eight on our instruction, as all Texas wools shipped east so 
far this year have moved on this rate. Understand Sam Hill, of the 
Growers Central Storage Co., quotes you as authorizing deduction of 
the rail and water rate which is less. Which rate should be used ?" 

Under date of September is Mr. Sam Hill addressed a letter to Mr. 
Lewis Penwell and in the said letter made the following reference to 
the said water rate: 

"Have not received wire from you as to instructing your water 
routing wool as was agreed on when I was in Washington." 

To which Mr. Penwell replied on September IS) as follows: 

"There is hitch with Railroad Administration regarding water 
rate. Have had matter up with them for two days, expect final 



23 

show-down to-day, will wire you. Have \vi ed Nichols revaluing 
you eight thousand pounds medium and Mexican wool." 

Under date of Septembe: 19 Mr. Lewis Penwell advised Charles N. 
Nichols as follows: 

"Have wire from Hill. San Angelo. requesting valuation committee 
pass on their medium and Mexican wool about eighty thousand 
pounds. Railroad Administration not yet advised' in rega ding 
water rate, hut hope I'o: final answer today." 

Under date of September 23 Mr. Lewis Penwell wrote Mr. Sam Hill 
as follows: 

"We received the following telegram from you this morning: 
Telegram received wool committee are working right along and 
will be he e at least anothe ■ week. Would prefer that you get final 
answer from Railway Administration by the end of next week or 
soone and then so instruct wool committee he e a. to routing wool 
by water. Wire answer;' and we wired you this ai'te noon as follows: 
'While it is desired by all inte'ested that wool from Texas concentra- 
tion points move via rail and water we deem it necessary that ap- 
praisal committee value on basis on all-rail delivery. Government 
Wool Administrator will then rebate difference in freight to growers 
if and when their wool moves via rail and wate . Rail oad Adminis- 
tration hopes it possible to have all these wools moved rail and water 
but, as can give no positive assurance, it is necessary that valuation 
be made on all- ail ba^is. ' 

"It is the desire of the United States Railroad Administration, the 
wool section, and the Quartermaster Department to have the wools 
from Texas concentration points move via the rail-and-water route 
whenever possible, and we trust there will be sufficient bottoms avail- 
able to have your wools move via the water route. However, as it 
is necessary that the Government Wool Administrator have these 
wools appraised, valued, and paid for without any unnecessary delay, 
we believe that it is necessary to assess the all-rail rate against the 
wool in order to avoid any delays in settlement. As we wired you 
to-day, if the growers are unable to ship the wool via water route the 
Quartermaster's Department will then rebate them the difference be- 
tween the all-rail rate as assessed and the rail-and-water rate under 
which the wool might move. You can readily undersl and that should 
the Government make freight deductions from Texas points on the 
basis of rail-and-water rates and later on would find it was impossible 
to have the wools move that way that it would be vrvy difficult to 
collect from the individual glowers the difference in freight rates. 

"We trust that the arrangements as outlined in our telegram to 
you to-day will be satisfactory to all concerned." 

Under date of September 23, 1918, Mr. Penwell wrote a letter to 
Mr. A. H. Barnard, Assistant Wool Administrator, in which he makes 
the following reference to the shipment of wool by the claimant: 

"I have your letter of September 18, and replying will state that 
the situation regarding the freight rate from Texas is as follows: 

"While Mr. Hill was here he asked me to go with him to the Director 
General of Railroads, which I did. We were there directed to see 
a Mir Buxton, who told us that it was the desire of the United States 



Railroad Administration to have the Texas wool come via water 

v<l of via rail, and I asked him to write me a letter ->< thai we 

Id have i 1 on file in our office. Mr. Hill immediately lef 1 for 

- and I have not seen e d from him .:<!ti ! ! \ e eived . 

:;-am saying thai he had quoted me as authorizing the t"e»l iction 

tte. Of eon - had no authority t< quote me. because 

1 had ne le any such statement. 

Elliott, in Xc'' ~'\ < id ay, and 

ed a telegram to Hill, • -: 

Have consulted 'sr. I^iliot! here. .'. e suggest that woo] 

-I al ion wit] • i anding 

an amount if s »s >d by 

■ fina ly ad- 

ith Raihvav Administration. The foregoing sugg nade 

ro expedite settlement. If this is - . Nichols at 

Bi -ion. where Mr. RUiol la\ ' : . es from 

il of wool v. : e by 

boal oul tna suggestion to expedite settlement." 

•■ I have jusl re< eived the following answer from Hill: 

'• 'Telegram received. Wool committee working right along. 
Will be here at least another week. Would prefer that you gel final 
an wcr from Railway Administration by end of week, or sooner, and 
then so instruct wool committee here as to routing wool by water. 
Wire answer,' and 1 have replied to him as follows: 

hile it is desired by all interested that wool from Texas con- 
centration points move via rail and water, we deem necessary that 
raisal committee value on basis of all-rail delivery. - Govern- 
ment Wool Administrator will then rebate difference in freight to 
growers if and when their vool moves via rail and water. Railroad 
Administration hopes il possible to 'nave all these wools moved rail 
and water but as can give no positive assurance it is necessary that 
valuation be made on all rail basis.' * : ' : ::: " 

Under date of October 26, L918, Mr. Penwell telegraphed Mr. A. 
W. Elliott as follows: 

" We telegraphed Central Storage Co. to send certain 8 months 
wool forward all rail. These wools belong to the Quartermaster 
Corps, and our instructions given San Angelo dealer- must be exe- 
cuted promptly. Any controversy arising in regard to all rail or 
water freight the rate can be adjusted later. Kindly wire Central 
Storage Co. at San Angelo to immediately ship forward wools as in- 
structed by Wool Administrator: otherwise important Government 
work w ill be delayed." 

Immediately upon receipt of the above message by the chief of 
the wool section. Mr. Sam Hill was telegraphed in care of the Wool 
Growers Central Storage Co. as follows: 

"Urgent Government requirements for gas defense make- it nec- 
essary that certain 8 month-' wool in your warehouse must move 
immediately via all rail. Kindly arrange to have these wools for- 
warded immediately all rail in accordance with instructions sent you 
by Government Wool Administrator. Boston, as important Govern- 
ment work must not be delayed." 



L'.> 

The foregoing letters and telegrams simply indicate an attempl on 
the part of the claimant to make arrangements with Mr. Lewis Pen- 
well for the shipment by claimant of its wool by the rail and water 
route, but, in our opinion, the same never resulted in any agreement, 
express or implied, that the Secretary of War, under the provisions of 
the act of March 2. 1919, is authorized to adjust or settle. 

Elliott on Contracts defines an agreement as follows: 

"Agreement, in the legal sense as here understood, is the union of 
t\\o_or more persons in a common expression of will, either by words 
or conduct, or both, affecting their legal relations. There must be a 
meeting of at least two minds in the same intention — an aggregatio 
mentium. As often said in common parlance, 'it takes two to mala 1 
a bargain.' And the common intention must be expressed, for a 
mere mental undisclosed intention or assent to an offer is insufficient 
and does not constitute an acceptance. As said by an English 
writer, 'An agreement is an act in the law whereby two or more 
persons declare their consent as to any act or thing to be done or for- 
borne by some or one of those persons for the use of the others or 
other of them." * * *." 

And again on page 25, paragraph 26: 

"In order to supply this requisite there must be a meeting of the 
minds as to all essential elements. Both parties must understand 
the same thing in the same sense and both parties must be bound or 
neither. There must be a meeting of minds on the subject-matter, 
relative to which the proposal and acceptance were in fact made aid 
entered into." 

The telegram under date of September 23 from Mr. Penwell to Mr. 
Sam Hill and letter of the same date from Mr. Penwell to Mr. J. H. 
Barnard, shows conclusively that there was never any meeting of the 
minds, or any agreement entered into between Mr. Sam Hill and Mr. 
Lewis Penwell for the movement of the wool of claimant by rail and 
water route. It is true that Mr. Penwell did use his best efforts to 
secure for the claimant the rail and water route, but it is also equally 
true that none of the negotiations ever resulted in any agreement. 
There is some evidence in the record of an alleged conversation 
between Mr. Hill and Mr. Penwell that occurred in the presence of 
the Hon. C. B. Hudspeth, Congressman from Texas. This ; lleged 
conversation occurred long after the negotiations between Mr. Pen- 
well and Mr. Hill and after the wools in question had been shipped to 
the Government and paid for. and in oui opinion the letters and te e- 
grams exchanged between Mr. Penwell and Mr. Hill, at and during 
the time of the negotiations, are the best and most conclusive evidence. 
An agreement to be binding must be positive and certain and both 
parties to it must understand the same thing and each party must 
be bound or neither, and this Board believes from the foregoing 
evidence that there never was any meeting of the minds and there 
no agreement could have or did result from the negotiations and the 



26 

exchange of telegrams and letters between Mr. Pern* ell and Mr. Sam 
Hill. 

For the foregoing reasons all relief asked for by the claimani 
both as to the payment to it on account of the alleged erroneous and 
wrong valuation of its wool and on account of the alleged agreement 
for the shipment of its wool by rail and water route is denied. 

Disposition. 

Final order denying relief will issue. 

War Department Claims Board, 
By R. R. Farr, 
Miior, Judye Advoc te, Member, Appeal Section. 
We concur. 

F. A. Morgan, 
Captain, Infantry, Associate Member, Appeal Section. 

Geo. L. McKeeby, 
Lt. Colon'!, Infantry, Acting Chairman, Appeal Section. 
Approved, August 20, 1920. 

Miller 1). Steever, 
Member, War Department Claims Board. 
Approved by order of the War Department Claims Board August 
28, 1920. 

A. L. Lansdale, 

Recorder. 

o 



